Sri Lanka is exploring the possibilities of blockchain technology and crypto mining via a newly appointed committee that will look into the dos and don’ts behind the development of a blockchain network.
Crypto Proposal Approved For Tech-Based Society
The committee was first proposed to the Srilankan Cabinet by the Minister of Project Coordinating and Monitoring Namal Rajapaksa. The intention was to research and develop digital banking, blockchain, and cryptocurrencies to pull in investments. As per the National Policy Framework - Vistas of Prosperity and Splendor, the Cabinet wanted to develop a technology-based society. Therefore, the Cabinet approved the proposal once it recognized the need to create an integrated system of digital banking, blockchain, and cryptocurrency mining technology. The decision was announced in a media release by the Government Information Department.
Duties Of Sri Lanka’s Crypto Committee
The committee, comprising experts from the public and private sector, will be mandated to study the regulations and initiatives of other countries such as Dubai, Malaysia, Philippines, EU, and Singapore, etc., and propose a suitable framework for Sri Lanka. Additionally, the committee is also looking into the anti-money laundering laws and regulations preventing terrorism financing and criminal activities of other countries, in addition to studying their preferred KYC processes. Finally, the committee will also be responsible for creating a gateway of approval via the Board of Investment for crypto mining companies to invest in Sri Lanka.
Unregulated Market Fueled By Economic Uncertainty
The crypto industry has thus far grown unregulated in Sri Lanka, with both veteran and new investors stumbling across the high-value asset class, especially in the wake of the economic devastation of the pandemic. Even though purchasing virtual assets using credit cards is prohibited in Sri Lanka under foreign currency exchange laws, Sri Lankans are using other ingenious methods like peer-to-peer crypto trading platforms or closed social media groups to buy crypto.
The country’s decades-long internal conflict, UN probes, and subsequent debts to China had cornered Sri Lanka into an economic cul-de-sac. The pandemic dealt an even further blow to the country’s budding tourism industry, with a devastating -3.6% economic growth in 2020, the lowest in 73 years. Even though Sri Lankans have been experimenting with crypto since 2015, the last 2 years have seen a rejuvenated interest in the market. More and more investors are attracted by the promise of quick gains in an ongoing crypto bull market. Hopefully, the committee will be able to develop and regulate the already ripe market.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.